Answered: Part 1: My current answers 2. Prepare…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

Please help solve Part 2&3 and show formulas:

The balance sheet for Tactex Controls Inc., provincially incorporated in 2021, reported the following components of equity on December 31, 2022.

Tactex Controls Inc.
Equity Section of the Balance Sheet
December 31, 2022
Contributed capital:
Preferred shares, $2.2 cumulative, unlimited shares authorized; 30,000 shares issued and outstanding	$	402,000
Common shares, unlimited shares authorized; 85,000 shares issued and outstanding		745,000
Total contributed capital	$	1,147,000
Retained earnings		388,000
Total equity	$	1,535,000

In 2023 and 2024, the company had the following transactions affecting shareholders and the equity accounts:

2023
Jan.	1	Sold 40,000 common shares at $11.64 per share.
	5	The directors declared a total cash dividend of $241,000 payable on Feb. 28 to the Feb. 5 shareholders of record. Dividends had not been declared for the years 2021 and 2022. All of the preferred shares had been issued during 2021.
Feb.	28	Paid the dividends declared on January 5.
July	1	Sold preferred shares for a total of $157,800. The average issue price was $20 per share.
Dec.	31	Closed the dividend accounts along with the $577,800 credit balance in the Income Summary account.
2024
Sept.	5	The directors declared the required cash dividend on the preferred shares and a $2.4 per common share cash dividend payable on October 28 to the October 5 shareholders of record.
Oct.	28	Paid the dividends declared on September 5.
Dec.	31	Closed the Cash Dividends account along with the $544,200 credit balance in the Income Summary account.

Part 1: My current answers

2. Prepare a statement of changes in equity for the year ended December 31, 2024. (Amounts to be deducted should be indicated by a minus sign.)

3. Prepare the equity section of the company's balance sheet as of December 31, 2024.

4
5
6
7
8
9
10
Jul 01, 2023
Dec 31, 2023
Dec 31, 2023
Sep 05, 2024
Oct 28, 2024
Dec 31, 2024
Dec 31, 2024
Cash
Preferred shares
Retained earnings
Cash dividends
Income summary
Retained earnings
Cash dividends
Preferred dividend payable
Common dividend payable
Preferred dividend payable
Common dividend payable
Cash
Retained earnings
Cash dividends
Income summary
Retained earnings
157,800
241,000
577,800
339,558
63,558
276,000
338,558
544,200
157,800
241,000
577,800
63,558
276,000
338,558
338,558
544,200

Required:
1. Prepare journal entries to record the transactions and closings for 2023 and 2024. The company uses a cash dividends account to
record declared dividends.
View transaction list
No
1
2
3
4
5
6
7
8
View journal entry worksheet
Date
Jan 01, 2023
Jan 05, 2023
Feb 28, 2023
Jul 01, 2023
Dec 31, 2023
Dec 31, 2023
Sep 05, 2024
Oct 28, 2024
Cash
Common shares
Cash dividends
Preferred dividend payable
Common dividend payable
Preferred dividend payable
Common dividend payable
Cash
Cash
Preferred shares
Retained earnings
Cash dividends
Income summary
General Journal
Retained earnings
Cash dividends
Preferred dividend payable
Common dividend payable
Preferred dividend payable
Common dividend payable
Debit
465,600
241,000
198,000
43,000
157,800
241,000
577,800
339,558
63,558
276,000
Credit
465,600
198,000
43,000
241,000
157,800
241,000
577,800
63,558
276,000

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

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